What is the estimated range for Due Diligence and Land Entitlement costs for an Epcon Communities project?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 3: Due Diligence and Land Entitlement Generally:
Due diligence and land entitlement are critical components of your project as they assure that the property you are considering purchasing is suitable for your project. Generally speaking, due diligence is the process by which you examine and inspect the property that you plan to purchase and may include investigation of the condition of title and physical conditions of the property, confirmations of fees, permitting, and processes required by various governmental agencies, market studies, geotechnical borings and testing for soil suitability, and architectural work to prepare the prototype plans provided to you by us. Generally speaking, land entitlement is the process of acquiring approvals for the right to develop your site with your project. It includes things such as zoning approvals, confirmation of the availability of utilities, obtaining permits for those utilities, tree clearing, and the completion of any other activity required so that horizontal development may commence.
In some municipalities, additional zoning approval from an architectural review board or committee is needed to allow you to use specific products, plans and materials that are part of our Development System. Obtaining these zoning approvals may increase the costs that you incur in connection with your project.
Note 3.A: Due Diligence and Land Entitlement for Developed Lots:
A nominal cost should be budgeted for due diligence when you are purchasing developed lots for your project. The land developer or seller of the developed lots can usually provide documentation for the prior due diligence that was completed by the land developer or seller in connection with its purchase and development of the lots. However, there may be approvals that require further research or procurement by you.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 22–32)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, due diligence and land entitlement are critical to ensuring a property is suitable for development. Due diligence involves examining the property, including title condition, physical aspects, fees, permits, and required processes from governmental agencies. It may also include market studies, geotechnical testing for soil suitability, and architectural work to adapt prototype plans. Land entitlement is the process of obtaining the necessary approvals to develop the site, such as zoning approvals and utility permits, enabling horizontal development to begin.
For franchisees purchasing developed lots, the FDD notes that a nominal cost should be budgeted for due diligence. The seller typically provides documentation from their prior due diligence. However, the franchisee may need to conduct further research or obtain additional approvals.
For franchisees purchasing raw land, the costs for due diligence and land entitlement are expected to be significantly higher. These costs are part of the upfront expenses associated with land development and site improvements, which encompass all horizontal construction costs required to prepare the land for building units and amenities. These costs include conceptual site plans, materials, labor, fees, permits, plan reviews, inspections, testing, bonds, site plans, and erosion and stormwater control measures.